ESG investing, SRI investing, Impact investing is that even profitable?
In today’s episode, we will speak to my friend Kyle from The Impact Investor.
Impact investing along with ESG investing and Social Responsibility Investing are terms you may have heard of lately, but what do these different terms mean and how can you contribute to a positive impact through investing?
Kyle has been a sustainable investor working for the last ten years with investment banking and private equity and he has a strong passion for personal finance. Together we will discuss as well how we can have a positive impact through investing,(and if this way of investing is profitable at all), how we can manage our daily purchase decisions and Kyle will give us tips to reduce your carbon footprint when traveling (his other passion).
…or listen on Apple Podcasts
This episode is for you if you want to make a positive impact through investing and/or if you want to understand the basics of impact investing.
- ESG, SRI, and impact investing?
- ESG investing: Focuses on 3 core measurable prongs. Environmental impact (carbon footprint), social impact (promoting equality among individuals), and Governance (e.g. a governance-based system where individuals from all backgrounds have an opportunity).
- SRI investing: This is more of a blank canvas, it is a values-based investing strategy, which will be different for each of us. Core values can be environment, gender equality, equal pay,… and they can be more than one.
- Impact investing: A “hybrid of the 2 other ones”: Investing for positive impact. It is a different way of thinking: My dollars will result in a measurable positive change.
- Investing in ESG companies?
- Look for rating agencies: MSCI, Sustainalytics, Morningstar (example: Tesla) that will provide you with the necessary info.
- The Impact Investor website of course!
- Look at ESG measures for companies within the same industry.
- ESG scoring per company will become more important in the future.
- There are as well ETFs suited for ESG, like S&P500 index funds without carbon-based companies.
- Cryptocurrencies and ESG?
- Crypto consumes a lot of energy.
- Some cryptos are less energy-intensive: Cardano, Ethereum 2.0 will consume less energy. (Proof-of-Stake vs Proof-of-work)
- Is it all profitable?
- Sustainable investing is about doing the right thing for the long-term (not quick gain, no shortcuts), for the foreseeable future. This type of investing will harvest sustainable profits for the future and these are the company that will win in the long run.
- It is about making decisions that will allow future generations to flourish.
- Day-to-day money management?
- Everything that makes up what we use or consume is finite, it requires energy to produce (unless renewable). Make decisions that reduce the impact on the earth, people, or communities. Ask yourself: “How it is made?” “Where is it made?”, etc. You will end up buying less stuff and hence save money and reduce your impact on the planet.
- Food purchases: Buy local, Support local farmers, this will reduce the length of travel and hence the carbon footprint impact. And buy in small quantities to avoid waste.
- Like to Travel? That has an impact, fly to a central place and favor electric or hybrid modes of transportation.
- Try to reduce your carbon footprint by not using a vehicle, or drive electric/hybrid if possible (I know it is not possible for everyone).
By taking all these small steps: Impact investing, buying more responsibly, and reducing our carbon footprint, we will all contribute to a better world for the future!
Who is Kyle?
- Facebook: The Impact Investor
- Twitter: @impactinvestor_
- Youtube: The Impact Investor
- Book recommendations:
- Best purchase below 100 euros: Ebook on SEO!
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